Continues to Drive IT Transformation Through True Converged Infrastructure

RICHARDSON, Texas, May 8, 2014 /PRNewswire/ -- VCE, the leader in converged infrastructure systems, today announced that it surpassed its 2013 goal of generating $1 billion in annual sales1, and demand for VCE products and services reached a $1.8 billion annualized demand run rate2 exiting the fourth quarter of 2013. In the first quarter of 2014, demand for Vblock Systems once again grew at well over 50 percent year over year, representing the fourth consecutive quarter of accelerated year-over-year growth and continuing VCE's record as one of the fastest-growing companies in IT industry history.

"When we set out to create VCE in 2009, we knew there was a significant opportunity to provide the simplest, most efficient way to deploy and run IT," said John Chambers, chairman and CEO, Cisco. "Four years later, we're witnessing a major industry shift toward the integrated infrastructure model that has drastically simplified IT and enabled enterprise and service provider customers to focus on delivering business outcomes. At Cisco, we view VCE as a natural extension of our application-centric data center strategy and look forward to continue driving the industry forward together."

"In only four years, VCE has revolutionized the IT industry through converged infrastructure, leading the way for customers to achieve truly transformative results for the most demanding, mission-critical environments," said Joe Tucci, chairman and CEO, EMC. "VCE has rightly earned the trust of its customers and partners, and we're delighted with the company's achievements. Through our strong partnership with Cisco, VCE has become a recognized leader for cloud infrastructures."

"VCE experienced a historic 2013, in no small part due to our laser focus on providing outstanding customer experiences and developing groundbreaking technology innovation," said Praveen Akkiraju, CEO, VCE. "Our enterprise and service provider customers have deployed Vblock Systems as their foundation for next-generation data center and cloud architectures across every major industry vertical including financial services, healthcare, energy and public sector. As we look toward 2014 and beyond, we expect to stay ahead of the innovation curve for converged infrastructure, with cloud-ready solutions and software capabilities that will accelerate customers' IT transformation while delivering dramatic improvements in operational costs and simplicity."

VCE also achieved several other key company milestones in 2013, including:

1,750th Vblock System Sold: After three years of product availability, VCE has now sold more than 1,750 Vblock Systems worldwide to more than 800 customers in nearly 60 countries, making Vblock Systems a key pillar of IT infrastructures serving numerous customer use cases and industry verticals.

No. 1 Market Share, Significant Industry Growth Expected: For the second year in a row, VCE has been named by a leading industry analyst group as the market share leader in integrated infrastructure systems3, with the highest revenue of any other converged infrastructure vendor – demonstrating technology leadership from VCE and signaling the industry trend toward convergence. Analysts also expect the integrated infrastructure category for integrated systems to grow at 43.2 percent CAGR to $11.2 billion in 2017, an increase from $3.6 billion in 20134.

Success with Global Service Providers and Telcos: In 2013, VCE and several major service providers further extended successful relationships to deliver differentiated public and private cloud computing offerings, including Capita, CSC and SoftBank. Additionally, seven of the 10 largest telecommunications companies in the world are now VCE customers.

Broader Product and Services Portfolio: In 2013, VCE launched several new products, including new Vblock Systems and new Vblock Specialized Systems for SAP HANA, Extreme Applications and High Performance Databases. The company also introduced the groundbreaking VCE Vision Intelligent Operations software, enabling the Vblock System to be managed as a single converged infrastructure object.

Geographic Expansion: Ending 2013 with more than 1,600 employees globally, VCE continued to expand its footprint throughout the year, building out its presence with new leadership in Europe, the Middle East and Africa (EMEA) and in Asia Pacific and Japan (APJ).

ABOUT VCE

VCE, formed by Cisco
CSCO, +0.42%
and EMC
EMC, +0.41%
with investments from VMware and Intel, accelerates the adoption of converged infrastructure and cloud-based computing models that dramatically reduce the cost of IT while improving time to market for our customers. VCE, through the Vblock systems, delivers the industry's only true converged infrastructure systems, leveraging Cisco compute and network technology, EMC storage and data protection, and VMware virtualization and virtualization management. VCE solutions are available through an extensive partner network, and cover horizontal applications, vertical industry offerings, and application development environments, allowing customers to focus on business innovation instead of integrating, validating, and managing IT infrastructure.

1Sales figure is based on 2013 VCE bookings.

2 Demand run rate is an annualized calculation of orders received in the applicable period by VCE, VMware, EMC and Cisco for the sale of VCE Vblock products and related services.

Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco's trademarks can be found at www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company.

EMC is a registered trademark of EMC Corporation in the United States and/or other countries. All other trademarks used are the property of their respective owners.

VCE and Vblock are registered trademarks or trademarks of VCE Company LLC or its affiliates in the United States and/or other countries. All other marks and names mentioned herein may be trademarks of their respective organizations. The use of the word "partner" or "partnership" does not imply a legal partnership relationship between VCE and any other organization.

FORWARD-LOOKING STATEMENTS

Cisco

This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among others, statements regarding the VCE partnership, VCE's impact for its customers, VCE as a natural extension of Cisco's application-centric data center strategy, VCE being poised to become the de-facto standard for cloud infrastructures, and VCE expected to stay ahead of the innovation curve for converged infrastructure. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including, among other things, the ability of the companies to partner successfully, the ability to achieve expected benefits of the partnership, business and economic conditions and growth trends in the networking industry, customer markets and various geographic regions, increased competition, global economic conditions and uncertainties in the geopolitical environment and other risk factors set forth in Cisco's most recent reports on Form 10-K and 10-Q filed on September 10, 2013 and February 20, 2014, respectively. Any forward-looking statements in this release are based on limited information currently available to Cisco, which is subject to change, and Cisco will not necessarily update the information.

EMC

This release contains "forward-looking statements" as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) component and product quality and availability; (vi) fluctuations in VMware, Inc.'s operating results and risks associated with trading of VMware stock; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) risks associated with managing the growth of our business, including risks associated with acquisitions and investments and the challenges and costs of integration, restructuring and achieving anticipated synergies; (ix) the ability to attract and retain highly qualified employees; (x) insufficient, excess or obsolete inventory; (xi) fluctuating currency exchange rates; (xii) threats and other disruptions to our secure data centers or networks; (xiii) our ability to protect our proprietary technology; (xiv) war or acts of terrorism; and (xv) other one-time events and other important factors disclosed previously and from time to time in EMC's filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this release.

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